M-I Egypt: Building a new empire on QHSE, new technology

Egypt—land of the Pharaohs, the pyramids and the Sphinx. It boasts one of the oldest cultures in the world, with historical records dating back more than 5,000 years to the first unified kingdom founded around 3150 BC by King Menes. Known for their amazing feats of engineering, the Egyptians are an industrious people who built the only surviving Wonders of the Ancient World as tombs and monuments to their gods. They were the first civilization to perfect the mummification process and the first to study astronomy and push the bounds of science. They were the first empire builders.

Although conquered over the centuries by the Greeks, Romans and later various European empires, the Egyptians maintained their identity and today the architecture of the ancient Egyptians stands as a monument to their creativity and drive.

M-I Egypt has begun to rebuild itself into one of the most promising regions in the world of oil and gas exploration and production. Under the guidance of Egyptian-born Country Manager Hazem El Shafie, the Egyptian operations of M-I SWACO are aiming to take service quality to the next level.

“We have to work as a team, where ‘team’ stands for ‘Together Everyone Achieves More’,” said Adel Wafi, QHSE manager. “We have empowered our employees to take charge of their own QHSE responsibilities. Our ultimate goal is to ensure that all of our staff returns home safely without being injured.”

Several QHSE training courses, including mandatory induction orientation (MIO), working at heights (WAH), confined space entry, Hazard Observation Card (HOC) and journey management, have been held to increase employee’s awareness and put them on the right track to improve their QHSE awareness and culture.

As a result, by the end of 2009, the number of HOC cards submitted in the last quarter in Egypt had tripled. It was apparent that the effort had succeeded.

“Management commitment is the key for our success,” said Wafi. “The QHSE moments at the beginning of each meeting helps stress the QHSE importance as well as reinforce management commitment to follow through on QHSE.”

Continuous improvement (CI) is also playing a major role in improving the performance and operations. People are now engaged in all the CI processes and Egypt has five White Belt certified employees. El Shafie is scheduled to go to the next Orange Belt training course.

“Our DSO and turn rates are heading in the right direction,” he said. “We have conducted two CI events this year focusing on how to differentiate ourselves from others and to look at service quality versus service price. We have made great improvement toward cross training and trying to sell our four business lines services as one company.”

M-I Egypt has invested a lot in infrastructure that would support deepwater drilling operations, such as training its engineers and giving them the exposure and experience required. This allows them to provide the customer with experienced hands that start planning for each project well in advance.

To help support these engineers on deepwater rigs, a high tech regional lab is under construction in the Alexandria Free Zone area to support Egypt and North Africa Operations. The lab is located within the main M-I SWACO warehouse premises in Alexandria, Egypt, about 140 mi (225 km) from Cairo. The prime goal of the regional lab is to improve the technical, environmental and economical performance of the existing drilling, reservoir drill-in and completion fluids as well as waste management services that M-I SWACO offers to ensure proper quality assurance and quality control is carried out. The lab facility will be used in correct application, and deployment of new technology is ensured by the Technical Services Group, which also provides customer support and training.

M-I SWACO Specialized Tools has had a great start to 2010 with the opening of a new workshop facility in the Alexandria Free Zone and they have recruited the best personnel to supply and support their clients’ needs from the new facility.

“At the same time, we were awarded the mechanical wellbore clean-up contract and filtration contract for Rashpetco, a joint venture between the Egyptian Natural Gas Holding Company and British Gas, for WDDM Phase 8 of their sub-sea campaign,” said El Shafie. “They will take delivery of a 1,200 ft2 Twin Press diatomaceous earth (DE) filtration package that is required to fulfill our client’s requirement. Rashpetco has also asked M-I SWACO Specialized Tools to supply our new technology for their workover program where we will supply the MAGNOSTAR* tool to assist in the removal of cuttings debris during milling operations while cutting windows.”

ST has also been closely involved with Pharaonic Petroleum Company (BP) in the planning of its completion program and with their expertise in wellbore clean-up services provided a mechanical wellbore clean-up system and completion fluid filtration service that will meet the client’s requirement through the next phase of its Mediterranean campaign.

M-I Egypt has eight warehouses throughout the country equipped with dry bulk storage and liquid mud mixing and storage facilities. The locations were strategically chosen to serve all customers in Egypt. M-I SWACO is the only mud company in Egypt that operates a barite ore grinding mill, which has been in operation since 1992.

The company operates three supply depots at Alexandria’s Abu Qir: one for BP, one for Shell and one storage facility for M-I SWACO. The depots have a storage capacity of 37,000 bbl of base oil, oil-base mud, ULTRADRIL*, silicate and brine. Sixty-four men work at the depots, running two shifts day and night. The facilities are headed by Sayed Saad, who has more than 35 years of experience in the oilfield. Saad started with M-I SWACO in 1985 as a mud engineer and has managed different locations for M-I throughout Egypt. He has been the manager of the Abu Qir base since 2006.

Under his management, the culture of QHSE has taken off. The facility is IMS certified (ISO 9001-2008, ISO 14001-2006 and OHSAS 18001-2007) and 12 of the workers are trained for handling dangerous goods transport. Five are trained for lab testing, and eight are trained and certified in first aid. A fully trained fire crew is always on standby, and each worker is given a full medical checkup annually.

The base boasts a full inventory management team that manages not only the mud and tools supplies for customers but computerized PPE lists that are tracked daily. The team also tracks waste and creates a monthly report on the waste produced, how it is stored and disposed of.

“We have good QHSE management,” said Saad. “HOC cards are one of the main tools I depend on and we have a good HOC card record. We constantly review the HOC cards because it helps to solve small problems before they become bigger issues and prove to BP our QHSE commitment.”

Saad also does risk assessments for every operation in both Arabic and English and makes sure that all HSE documents are translated into Arabic so that everyone on base understands the implications. Even the reports from the HOC cards are posted, and the information serves as a motivational system that encourages crews to follow up and manage their own QHSE.

And the culture of QHSE at the M-I SWACO Abu Qir bases extends to the customers. Two to three times a week, M-I SWACO crews sit down with BP and Shell crews and base management for a half-hour training session to discuss recent QHSE alerts and discuss key lessons. The sessions are simple and cover things like how to write HOC cards.

Extending the lessons of QHSE to the customer is taking hold in other parts of Egypt, too. A QHSE contractor meeting was held recently with Shell, sponsored by M-I Egypt. M-I Egypt management and project engineers gave presentations and led workshops on risk assessment and general QHSE procedures.

“The workshop was very effective and Shell has commended our efforts,” said El Shafie. “It added value to our relationship with Shell because we included a lot of interactive sessions; it wasn’t just death by PowerPoint^.”

Shell has started a new HTHP campaign with a 23,600 ft (7,200 m) well in the Mediterranean Sea with expected bottom hole temperatures of 410° F (210° C). The second well will exceed 26,200 ft (8,000 m) and have even higher temperature expectations.

“Both wells present a big challenge for Shell HPHT wells,” said Moustafa Hamed, project engineer. “This high temperature is very challenging in terms of getting information from downhole tools and extended logging program duration. We have introduced two of our successful new technology solutions to Shell, PRESSPRO* RT and WARP*. Both solutions are being implemented for the first time in Egypt and MENA regions.”

Shell is pleased with the work and likes having the same people involved in previous Shell campaigns working on this campaign. Wilco Geldof, Shell senior well engineer, said it provides continuity and understanding of the drilling program challenges.

“Working with Shell has really been a very good experience and presents an excellent example on working relationship with customers,” said El Shafie. “It’s a partnership. Understanding and transparent communication has played a very good role in sorting out any issue that could arise. It has always been based on a win/win way of thinking.”

Likewise, Petrobel has always been keen to try new technology that will add value to their operations with new technology like the latest Ultradril system. M-I Egypt just finished work on Petrobel’s Denise campaign where three consecutive successful exploratory wells were drilled in the Mediterranean Sea and M-I Egypt received an appreciation letter.

“Every well in the Mediterranean Sea is a new challenge, so we had to be prepared with our best weapons and one of them is M-I SWACO systems, ” said Stefano D’angelo, senior fluid and cementing engineer expert coordinator ENI.

Petrobel is also busy in the Gulf of Suez with two rigs running full time. Three land rigs are operating using lots of different fluids like the VERSADRIL* system.

“Petrobel faces unique challenges for each new well,” said Khaled Fares, project engineer. “It is very challenging for us and represents an opportunity for us to prove how we can add value to our customers. The area is classified as high pressure zone that requires mud weight to be changed four times per well to maintain well stability and integrity—9.3 lb/gal (1.11 sg), 16 lb/gal (1.5 sg), 9.6 lb/gal (1.15 sg) and 7.5 lb/gal (0.5 sg) mud.”

Qarun, a joint venture company between Apache and the Egyptian General Petroleum Company, is drilling exploration and development wells in the Western Desert, the area to the west of the Nile River, and has been very busy with six drilling rigs and six workover rigs.

M-I Egypt collected shale samples from the 8 1⁄2 in interval from all the formations drilled. The samples were sent to Houston for shale reactivity and X-ray diffraction to determine the exact mineralogy of the shale. According to the test results and based on Houston’s fluid recommendations, a new fluid approach was used in the next well with new mud weight profile recommendations.

“After changing the mud system,” said Beau Buisson, deputy drilling general manager Apache, “everything was okay. M-I SWACO provided more than just technical engineering; they provided solutions to prevent problems. With M-I SWACO, it is possible to do things that otherwise, we could not.”

Spanish oil company Cepsa has drilled four exploratory wells in cooperation with Total and is expecting to drill four to five wells per year per rig. These are deep wells in the Western Desert, presenting many technical challenges as all exploratory wells do.

“We get a good response to problems like lost circulation,” said Sabry Mansour, Cepsa drilling superintendent. “We work closely with M-I SWACO and get good support.”

Cepsa has started to see some higher temperatures and mud losses in the loose sand but has been pleased with the technical response from M-I SWACO.

“The strength and reputation of M-I SWACO throughout the world, and its growing reputation in Egypt as a willing partner has gained M-I Egypt many friends in the region,” said Randall Parks, Cepsa commercial manager.

One of those friends, the Petro Dara/TransGlobe Company, recently drilled its first horizontal well with no problems and is looking at more challenging wells.

“It was a big challenge to drill a horizontal well in one of the most troublesome areas at Gulf of Suez without a top drive only Kelly,” said Farag Ismail, TransGlobe drilling manager, “The mud system has played a major role drilling this well successfully. We used water-base mud for the buildup section, while the VERSACORE* minimal-water system was utilized for the horizontal section. Using an M-I SWACO 519 HV high volume, fully hydraulic centrifuge saved a lot, minimizing dilutions rate with base oil while drilling with very low weight 7.8 lb/gal Versacore mud.

While DS and ST are leading the way in Egypt, both Environmental Solutions (ES) and Production Technologies (PT) are showing promise and their efforts are focused on selling the newest technology offerings from their respective business lines.

“New Technology within the ES business lines is our focus,” said Brad Olson, ES area manager, North Africa. “Most of the solids control business in Egypt is a centrifuge and service engineer provided at low bid with little emphasis on performance. The biggest hurdle is educating customers to the benefits of new technology. We have to prove the value of new technology and the benefits it produces in order to get the business.”

Thanks to the experience ES has through North Africa and the international reputation for environmental solutions, the group is managing to gain traction with both the IOCs and the NOCs in Egypt. But, Olson said, there is a great deal of potential yet to be addressed such as production waste management, AUTOMATIC TANK CLEANING*, CLEANCUT* and capital sales in general. The best approach to sell this technology, and all the new technology offered by the four product segments, is with a unified approach rather than as individual business units.

“We need to be seen by the operators in Egypt as a solution provider, from drilling to environmental solutions and waste management through to production,” said Olson. “It is a matter of educating our own project engineers, cross training them to sell us as one unified company. Drilling Solutions (DS) has a relationship with the operator and can extend it to ES. We have to start with our own people.”

Production technologies gained a good market share in 2009 in Egypt and have been awarded a big contract with Qarun for pour point depressants (PPD).

“We are now adding more resources to enhance our offerings and increased market share,” said Amr Abdel Kader, PT operations manager. “We are now making a study to build a blending facility in the Free Zone to improve our costing structure to enhance our competitiveness in the market.”

With many challenges ahead, from bringing together the four product segments into a unified company seen by local and international operators in Egypt as a one-stop solution for all of the oil and gas challenges, to establishing a culture of safety, M-I Egypt faces a long and often difficult road ahead. But like the ancient Egyptians, the young team has a vision and a plan to build an operation that will be a wonder of the M-I SWACO world.

“It is a challenge,” said El Shafie, “but a great opportunity. That’s the message.”